The Landscape is Changing

As more and more people move to streaming online to chop down on their cable bill, one of two things are absolutely going to happen in short order:

Cost of high speed broadband will rise

Cable companies will learn to compete and bring back customers

Up until the last decade cable and satellite companies had a monopoly over the content you watched on your TV. You were either watching someone from their lineup, or a DVD you rented. Now the sources of media you can watch, and methods with which you can watch them on your TV are numerous; almost too numerous as every hardware company struggles to figure out the ultimate “streaming video” solution for you.

It is All About Accessibility

Online streaming video services like Hulu have exploded in popularity over the last few years, not because no one has tried streaming video before, but because noone had ever offered access to commercial media that easily before. Hulu began rolling ads into their streaming video over a year ago, but it wasn’t until the last month or so that we got a glimpse into additional monetization strategies by the online video favorite in the form of Hulu Plus. We fully expect to see other revenue channels for Hulu spring up as they develop exclusive contracts with streaming video hardware providers (Boxee, Xbox 360, PS3 all come to mind) and continue to offer premium service levels to subscribers.

With services like Hulu, Apple iTV and YouTube Rentals, I have learned that I can have the content I want, when I want it, NOW, just by clicking a button. So when my cable provider (Cox, Comcast, Dish, DirecTV, Charter, etc.) tells me “Sorry, you have to buy expensive channel packages every month to get 10 channels you want and then extra for HD and extra for a DVR and then taxes” to watch my shows on their schedule, I balk at the idea; along with a hell of a lot of other people.

We reject that. That is TV of yester-year. That is the viewing experience our parents had, but we have all the time-shifting technology and broadband access that should, and does, invalidate that argument. So, the younger viewing generation, is beginning to reject cable providers and walk away. What can they offer me that I can’t get somewhere else more efficiently?

Dish Network’s Move to Stay Competitive

Cable providers must compete with that instant-on demand that we require now.

TiVo was a step in the right direction, but on-demand streaming is the next leap in the right direction. The only way to stay relevant is to give us that same experience that we are getting else where, and that is what Dish Network is doing with it’s online streaming service: Dish Online.

Dish Online

Dish Online is a flash-based, video streaming (and DVR rental) service that looks to be a joint venture between Dish Network and Hulu.

Dish Online works in the following manner:

Streaming free content (TV shows or movies) online? It will stream from Hulu.

Your access to the Dish Online premium content is dictated by your current channel subscriptions. For example, here is what my screen looks like, you’ll notice I don’t subscribe to Starz, so that content is marked as requiring an Upgrade to view:

If I was a subscriber to these premium channels by way of my Dish Network subscription, this content would be accessible to me to stream instantly.

Update #1: Reader John points out that Dish has removed easy filtering for just “free” content and have buried it among all the other premium or pay content you need to filter through now. We aren’t sure yet if Dish did this out of confusion on how to better monetize the service, or if they were concerned with driving too much traffic to Hulu and not making a big enough effort on promoting their own service.

Typically the “free” content you have access to is literally just re-listings of Hulu’s lineup for you. I tried out a few shows and noticed they all came from Hulu (no I don’t normally watch this show):

Viewing the “free” movies is much the same, they all come directly from Hulu and not from Dish Network. Unfortunately you don’t seem to have access to the full controls in the normal Hulu player, like turning HD video on or off, or adjusting the quality of the video dependent on your connection speed.

In summary, all the “free” content is basically a slightly crappier interface to just using Hulu.

Dish Network, smartly so, is only involving themselves in the “online video streaming” game when it comes to premium content. In this regard, you have access to premium content listings both for streaming online as well as renting directly to your DVR (Dish will initiate an upload of the movie from their server to your DVR via the website when you do this):

Once you’ve selected if you want to Watch Online or Rent to DVR, the content browsing interface is nice, simple and functional. You can quickly filter out all the content that is locked, so you only see content that is actually accessible to you and then further filter down genre or rating:

I didn’t check the “Unlocked movies only” because with my subscription level, it’s an embarrassing list of things you’d never want to watch anyway. Anyway, viewing any of the free content that is accessible to me ends up just streaming from Hulu anyway, as described above.

Unfortunately Dish Online is not rolling out a general-purpose video streaming service for every Dick and Jane Smith out there, the purpose of the premium content in the service is to bait you into upgrading your subscription level to gain access to the on-demand media.

For example, here is what the page looks like for District 9 (Starz) on my screen:

Besides the nice basic information (future air times that I can schedule on my DVR and ratings) there is an Upgrade button ready to walk me through the process of likely buying monthly access to the Starz channel as part of my package. There is not the option for me just to pay and rent this single movie for a 1-time fee.

Dish Network is smart, they need the subscriptions, they need the return customers. $4 here and there for rentals is not going to boost them ahead any sort of competition with DirecTV or cable providers.

Conclusion

Dish Network has done something very smart here. They aren’t going to compete with Hulu and win at the “stream every TV show ever” game. Instead, they partnered with Hulu to stream that content, keep showing their ads and just deliver content to happy users.

Mixed in with the “free” content that Dish Online is showing from Hulu, is premium content, all with a single goal in mind: Convert you to a Dish Network subscriber.

Had Dish Network tried to launch a service that digitized, stored and streamed all the innocuous content AND premium content, they would be buried in legal and technical issues until the service eventually imploded.

Had they just launched with only premium content like other streaming services have tried, it would have flopped. People want more than just the latest movies to watch, we want our random long-tail TV shows that we loved when we were kids, and we want every episode of them.

The service is still tied so tightly to converting you into a Dish Network subscriber that it doesn’t seem to have the mass-appeal like a Netflix or Hulu does. Instead it seems to be a “premium” incentive for you to stay a Dish Network subscriber and hopefully upgrade your subscription.

It will be interesting to see if this value-add service from Dish will bolster subscriptions or if they will have to generalize the offering in the future to allow individual-rentals without a subscription requirement to monetize the service effectively.

Either way, it’s great to see the competition if for no other reason than it makes the production companies more comfortable with the idea that online streaming is a place they have to put their content. In turn, our content becomes more accessible from many different avenues to us.

2 Responses to “Dish Network Launches Video Streaming Service with Help from Hulu”

Unfortunately, Dish Network just revamped the UI of their On Demand television and movie service. They removed the “Free” filter so that you can no longer conveniently find the free content. (You’re welcome to thumb through all two-thousand-some-odd selections one at a time, looking for the free ones, if you want.)

I thought the whole business model was supposed to be built upon the premise of luring customers in with free content and getting them hooked on how great the service is, so that they’re willing to pay for more/premium content. I guess not. Dish wants it to be as user-unfriendly as possible.

Thanks for the heads up. It seems to me that Dish didn’t have the monetization strategy totally figured out for this service before rolling it out — they just didn’t want to get left behind without their own streaming solution.